Streams

Balance Sought Between Energy Efficiency and Profit

Thursday, February 05, 2009

The stimulus package contains billions of dollars in grants for solar and wind power projects. But a provision in the bill to increase energy efficiency has sparked a fight between environmentalists and utilities on one side, and consumer advocates and regulators on the other. WNYC's Ilya Marritz reports.

REPORTER: In most businesses, you make more money by selling more product, be it hamburgers, bottled water, or laptops. In the energy sector, selling more electricity and gas means putting more carbon dioxide in the air. That conflicts with President Obama's goal of lowering emissions. The House and Senate are considering changing the incentives, through a mechanism called "decoupling." Erin Allweiss is with the Natural Resources Defense Council.

ALLWEISS: It breaks the link between how much energy people are using and sales.

REPORTER: Here's how decoupling works: in most places, regulators set rates based on the market price of energy. Under decoupling, the regulator decides how much revenue the utility should make, then and charges ratepayers accordingly. If a utility sells less electricity because they became more efficient, no problem! The utility can charge users a few cents more and recoup that lost revenue.

ALLWEISS: you can imagine going to a utility company and having them come weatherize your home, instead of just paying them for the electricity they're providing.

REPORTER: It's an idea with broad support among environmentalists, and utilities like it too. But there is growing opposition.

SLOCUM: Decoupling is energy efficiency's version of trickle-down economics.

REPORTER: Tyson Slocum is with Public Citizen. He says efficiency savings should be passed on to the consumer, not the utility. And the 50 state utility regulators are also lobbying against: they don't want a one-size-sits-all approach.

If energy decoupling stays in the bill, New York and New Jersey could benefit. They're among a handful of states that have tried decoupling, and would therefore be eligible for billions of dollars in efficiency grants. For WNYC, I'm Ilya Marritz.

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